REA Group (ASX:REA) has reported full-year earnings that surpassed market expectations, lifted its dividend by 25%, and outperformed its own listings guidance, even as Australia's largest property advertising company cautioned that the housing market is likely to moderate in FY27.

The operator of realestate.com.au posted core net profit after tax of $650.5 million for FY26, representing a 15% increase from the prior year and coming in ahead of analyst forecasts. Revenue climbed 7% to $1.79 billion, while core EBITDA rose 12% to $1.09 billion. REA's dominant position in Australia's property portal duopoly, where it competes primarily with Domain Group (ASX:DHG), has historically given it substantial pricing power that supports earnings growth even when transaction volumes soften.

Shareholders will receive a fully franked final dividend of $1.73 per share, bringing total FY26 dividends to $2.97 per share.

Despite a challenging housing market, national residential buy listings finished flat for the year, better than the company's earlier guidance which had projected a decline of between 1% and 3%. REA also delivered 13% growth in Residential Buy yield, driven by sustained demand for premium advertising products.

Looking ahead, however, the company anticipates continued pressure on listing volumes. REA has guided FY27 national residential buy listings to be flat or down by low single digits, with July listings already tracking 2% lower year-on-year.

The weakness has been most pronounced in Sydney and Melbourne, where combined listings fell 16% in July. By contrast, Brisbane, Perth, and Adelaide recorded 13% growth in listings during the same period, a divergence consistent with broader Australian housing trends that have seen smaller state capitals outperform the larger Sydney and Melbourne markets in both price growth and transaction activity in recent periods.

Rather than depending on higher listing volumes, REA intends to drive earnings growth through pricing. Residential Buy yield is projected to grow at a low double-digit rate in FY27, underpinned by an 8% increase in Premiere+ pricing and continued adoption of premium advertising products.

Chief executive Cameron McIntyre emphasized that the company's audience remains a critical competitive advantage during softer market conditions.

"More Australians trusted realestate.com.au for their property needs than ever before in FY26, with a record 12.7 million average monthly visitors," McIntyre said.

He also identified artificial intelligence as a long-term growth opportunity, noting that REA's audience, proprietary data, and product pipeline position the company well for future expansion. The company did not disclose any financial contribution from its AI initiatives.

On its international portfolio, REA confirmed that Housing.com in India has been sold to Aurum PropTech, with REA retaining a 24.9% shareholding. The company also holds an approximately 20% stake in Move, Inc., operator of realtor.com in the United States.

REA Group shares were up 3.80% on the day, trading at $172.64 per share.

Source: The Market Online Australia